9 Responses to “(Letter) Hon Hai’s Terry Gou Donates His Wealth”

As a former employee of Hon Hai, I have to say that Terry Gou is a real businessman, and one who cares about the development of his workers. All workers at the factory were encouraged to develop themselves through reading and training, although salaries may have been low as compared to Taiwan, they were not low as compared to neighbouring factories. People are worked hard at Hon Hai factories, myself included, but I cannot claim to have worked as hard as the factory line workers – the majority of whom were doing so so as to earn overtime money to send to their families. If you visited any of the post offices on the Foxconn campus in Shenzhen between 8 in the morning and closing time you would find a queue of people waiting to send money to another part of China.

This said, the campus does feature large Mao-style signs bearing Terry Guo’s quotations (“The ability to solve problems is the best way of judging an official” was my favourite), the company is very controlling of its workers, making new recruits undergo military-style drill was just a part of the company’s efforts at indoctrination. However, it is not the only force on campus doing that – Communist party offices, display boards and symbols are visible across the campus.

Legal efforts at preventing unfavourable reporting on the company are perhaps the worst element of company policies in the last few years. I’m sure you are all aware of the case where the company attempted to sue two reporters from China Business News (note, sue the reporters, not the newspaper) for writing an unfavourable report on the company, this was a particular low point.

Terry Guo himself is a hard-working man, when he visited the mainland he was usually at the campus swimming pool around 6 a.m. and would not finish work until very late indeed. He will be retiring soon, so the race is on between the various “warlords” (and no, I won’t say who said that) within the company as to who will replace him. I’m going to take a random guess and say none of them.

I read somewhere that when Terry Gou started his business, he had already aimed at Wang Yung-ching, Taiwan’s richest businessman at the time. He had his workers do exercies everyday and shout that they would exceed Wang. Some of his workers thought he was crazy and his business wouldn’t last long, and left. His type of management is more likely of Taiwanese origin or even Japanese one because Taiwan had draft and everyone went to military service and had this military mindset. Therefore, I won’t say it’s Mao-style.

In that Shenzhen case, it was more than unfavorable reporting. It was a serious accusation. The contractor, Apple Computer, had to do an investigation and concluded in his favor. You didn’t mention that.

@Netizen – I would go and read the report in full if I were you (which was done by an independent company), and even if everything in the CBN report was false (and remember, Foxconn did not actually accuse the journalists of lying, but of “tarnishing Foxconn’s reputation”) the way in which Foxconn reacted by having the assets of the journalists frozen rather than going after the publishers of the story was completely unacceptable and would have been a travesty of justice had they continued with it.

Mainland workers at Foxconn would often attribute all the military-style drill and hierarchical management style to Taiwanese-style management, but I do not know of one civilian workplace in which this kind of drilling happens in Taiwan – perhaps it happened in the past, but not today. The management style, though, is quite Taiwanese.

As I said before, an investigation was conducted by Apple and the accusation by the reporters could not be substatiated. So, continuing to repeat the unsubstatiated reporting is unfair to the company, I think.

@Netizen – Read the report that was written by the auditing company that Apple commissioned to do the investigation (remember, an investigation by Apple themselves would have been meaningless), I have not repeated any accusations from the China Business News report, but only those things I saw with my own eyes. Once again it is worth remembering:

1) Foxconn could have sued the Daily Mail in the UK for their report had it been false, but they didn’t, instead they chose to sue CBN in China only.

2) Foxconn sued CBN for ‘tarnishing their reputation’, not for libel.

3) The audit was, of course, instituted after the news report came out.

4) The audit did show that the code of practice had been broken.

5) The audit only covered that part of the facility which made Apple products.

6) Even the accusation of ‘tarnishing’ was eventually dropped.

Now, before you get the idea that I am some kind of embittered former employee with a grudge, I will say that most of these practices are common in manufacturing in China, and that Foxconn is actually quite a bit better than the rest. I enjoyed my time at Foxconn and still stay in touch with the people who work there.

If it could, Foxconn would have sued the Daily Mail, a disreputable media outlet, in my view. Because it’s based on UK and didn’t have any assets in China, Foxconn obviously could get its hands on that newspaper.

Relatedly, I think China should follow MM Lee Kuan Yew’s advice in managing foreign media. Having foreign media put up a few hundreds of thousand dollars in deposits and have local legal representation before granting their registrations in doing business locally. When libel occurs, there is a legal identity to sue and compensation to be had.

@Netizen – However Foxconn does have assets in the UK, and companies can sue for slander committed here about matters overseas (the person’s rights in the UK are infringed – this is enough) – this is a fallacious argument. I’m sure you know that the UK does have very strict (many would say overly strict) rules on libel, confidentiality, unfair use of copyright, etc. etc. I’m sure you know of the recent case involving Max Mosley and The News Of The World. However, there are broad exceptions to this where the publishing was view to be in the public interest, as almost certainly it would have been judged in the case of the Daily Mail report. Finally, I would say that the highly adverse reaction to Foxconn’s actions brought, as well as the fact that they dropped the case, shows that even had the measures that Lee Yuan Yew advised been in place, the result would most likely not have been good for Foxconn.